Tred R. Eyerly | Insurance Law Hawaii
The exclusion for suits arising out of construction of condominiums encompassed the underlying claim for faulty construction of a retaining wall. HT Serv., LLC v. Western Heritage Ins. Co., 2021 U.S. App. LEXIS 16259 (10th Cir. June 1, 2021).
HT Services was a land developer. HT Services designed and constructed a residential community. The AOAO sued HT Services for negligent design and construction of a retaining wall. When its carrier, Western Heritage Insurance Company, denied coverage, HT Services sued. The district court granted summary judgment to Western.
The exclusion eliminated coverage for claims or suits “arising out of, relating to or in any way connected with ‘your operations’ . . . involving the development [or] construction . . . of . . . condominiums . . . or . . . residential structures.” HT Services argued that a retaining wall was not a “residential structure.”
The Tenth Circuit agreed with the district court. Because the retaining wall was constructed as part of the development of the residential community, the HOA’s allegations concerning defects in the retaining wall fell within the exclusion.
Coverage was also barred under exclusion j (6), which prevented coverage for property damage to “that particular part of any property that must be restored, repaired, or replaced because ‘your work’ was incorrectly performed.” The allegations of the underlying complaint asserted that the AOAO suffered damages resulting from HT Services’ “defectively . . . constructed retaining walls,” which were squarely within the exclusion.
Therefore the district court’s granting of summary judgment was affirmed and there was no duty to defend.